Correlation Between Paragon 28 and IRIDEX
Can any of the company-specific risk be diversified away by investing in both Paragon 28 and IRIDEX at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Paragon 28 and IRIDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and IRIDEX, you can compare the effects of market volatilities on Paragon 28 and IRIDEX and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Paragon 28 with a short position of IRIDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and IRIDEX.
Diversification Opportunities for Paragon 28 and IRIDEX
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Paragon and IRIDEX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and IRIDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRIDEX and Paragon 28 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Paragon 28 are associated (or correlated) with IRIDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRIDEX has no effect on the direction of Paragon 28 i.e., Paragon 28 and IRIDEX go up and down completely randomly.
Pair Corralation between Paragon 28 and IRIDEX
Considering the 90-day investment horizon Paragon 28 is expected to under-perform the IRIDEX. But the stock apears to be less risky and, when comparing its historical volatility, Paragon 28 is 1.05 times less risky than IRIDEX. The stock trades about -0.01 of its potential returns per unit of risk. The IRIDEX is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 230.00 in IRIDEX on August 24, 2024 and sell it today you would lose (58.00) from holding IRIDEX or give up 25.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paragon 28 vs. IRIDEX
Performance |
| Timeline |
| Paragon 28 |
| IRIDEX |
Paragon 28 and IRIDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paragon 28 and IRIDEX
The main advantage of trading using opposite Paragon 28 and IRIDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, IRIDEX can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IRIDEX will offset losses from the drop in IRIDEX's long position.| Paragon 28 vs. Pulmonx Corp | Paragon 28 vs. Iradimed Co | Paragon 28 vs. Orthofix Medical | Paragon 28 vs. Neuropace |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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